Gross Sales/ & or Gross Income Tax Business Tax

Receipts
Graduated income tax rate Percentage tax under Sec 116
on compensation income and of the tax code on income
income from self- from self-employment only.
employment
OR , at the option of SEP:
• Compensation Income- Graduated Rate
• From Self-employment:
Not more than 3,000,000 8% of the Gross Sales/Receipts and other non-
(exclude compensation operating income IN LIEU of the graduated tax rate
income) and Section 116

Note:
• The 8% tax is applicable only to income arising from
self-employment and/or practice of profession. It is
not applicable to compensation income
• If the SEP is mixed income earner, the 8% tax rate is
based on the gross sales/receipts without deducting
P250,000.

More than 3,000,000 Graduated tax rate for both
(exclude compensation types of income
Income)
Note: The option to be taxed
at 8% is not applicable
Value added tax unless
engaged in vat exempt sales
and transactions under the
Section 109 of the tax code
 RECEIVED BY
CITIZENS & NRA ETB NRA NETB
RESIDENTS
1. INTEREST
A. Interest form any currency 20% 20% 25%
bank deposit

B. Yield or any other monetary 20% 20% 25%

benefit from the deposit
substitutes

C. Yield or any other monetary 20% 20% 25%

benefit from trust funds and
similar arrangements

D. Interest income received from 15%

a depositary bank under the NRC- EXEMPT EXEMPT EXEMPT
expanded foreign currency
deposit system

E. Interest income from long EXEMPT EXEMPT 25%

term deposit or investment

If pre-terminated before fifth year, a

final tax shall be imposed based on
remaining maturity as follows:

• 4 years to less than 5 years 5% 5% 25%

• 3 years to less than 4 years 12% 12% 25%

• Less than 3 years 20% 20% 25%

2. ROYALTIES

A. Royalties in general 20% 20% 25%

B. Royalties on books, as well as

10%
other literary works and 10% 25%
musical compositions
 RECEIVED BY
CITIZENS & NRA ETB NRA NETB
RESIDENTS
3. PRIZES

Prizes exceeding P10,000 20% 20% 25%

4. Other Winnings

OTHER Winnings regardless of 20% 20% 25%

amount

PCSO Winnings:

• Amount is < 10,000 Exempt Exempt 25%

• Amount is > 10,000 20% 20% 25%

5. CASH AND/OR PROPERTY

DIVIDEND

Cash and/or property dividends

actually or constructively received 10% 20% 25%
by an individual from a domestic
corporation

Citizens and Residents NRA ETB NRA NETB

1. Capital gain from sale of shares of
stock of a domestic corporation not 15% 15% 15%
traded in the local stock exchange

2. Sale or real property located in the

Philippines 6% 6% 6%